Home ›› 27 Oct 2022 ›› Editorial
By choosing Rishi Sunak as their prime minister Britons have shown they need a capable leader to navigate their nation regardless of his color or religion. Finding a man of Indian origin as their manager whose ancestors were subject of British colonial rule is a testimony to their magnanimity.
We Bangladeshis are happy to find in Sunak’s skin the same amount of melanin we have. Hopefully, Rishi Sunak will, as he promised on Tuesday in front of 10 Downing Street, conduct his government with professionalism, honesty, and reliability. His gravitas was convincing, his steely determination palpable.
His 6-minute speech was striking for its tone and tenor: scholastic, humble and yet confident. Like Nelson Mandela and Barack Obama, Sunak may also enter history as an iconic statesman. The cabinet Rishi Sunak has just formed is a continuity one with the experienced people to save time and ensure stability as he must correct the mistakes as immediately as possible.
He has inherited a daunting cocktail of economic and political turmoil after his predecessor’s massive package of unfunded tax cuts roiled financial markets and drove up mortgage costs for millions of Britons. He has three days to put the finishing touches on an amended economic plan, with a fiscal statement due on October 31. Liz Truss, the immediate past prime minister was also bold, and she was right to foresee a Britain as a strong nation to stand out. But her ‘Low Tax, High Growth’ mantra crashed, and an extraordinary political immolation ensued.
After 44 days in office, she resigned as prime minister setting in British history a record of shortest tenure of a premier at 10 Downing Street. She did not intend to cling to power like some of her predecessors. Her “mini budget”, based on a mix of Thatchernomics, Reaganomics, and her own Lizonomics, turned out to be a “maxi disaster”. The mini budget prescribed 45 billion pounds in corporate, income and payroll tax cuts benefiting mostly the wealthy, alongside 60 billion pounds in energy spending support. This was a humongous fiscal package that was unfortunately not based on a public mandate through general election.
As a consequence, the British pound dropped to its lowest value against the dollar, and the Bank of England had to intervene to save contagion from spreading into other vital systems. Interest rates rose steeply at a time when the country was already struggling with sky-rocketing energy costs and high cost-of-living for both individuals and businesses. Animated by a fantasy version of free market in a laboratory of new ideas, the outgoing premier invented that ‘trickle down’ formula would work in Britain as it perhaps did in Reaganomics and Thatchernomics ages ago.
An idea of liberal utopia fired her imagination. Reaganomics was once based upon supply side theory. It means if you free the capitalists to produce and create things, the masses will buy them and those at the top will reap large profits, and there will be so much profit that it overflows to everyone below, hence the phrase "trickle down" economics. So, proponents of Reaganomics love to let the wealthy bear low taxes. In a 2015 assessment, the International Monetary Fund rubbished ‘trickle down’ and said governments should instead focus on policies that would directly help those on low and middle incomes. At last, a cowed Ms. Liz Truss apologized.
She fired Kwasi Kwarteng and appointed Jeremy Hunt as new Chancellor of the Exchequer. Dusts were gradually settling down. Uproars among conservative members however short-lived her premiership. Liz could perhaps survive the storm if she was a bit slow in introducing her experimental policy preceded by a little litmus test. The conservative party members could also wait only a few weeks more to see how the newly appointed chancellor Jeremy Hunt’s reversal of “Low Tax High Growth” policy did work. But patience always runs thin in the fractious conservative party.
Then, out of the dramatics in British politics has appeared Rishi Sunak to be the latest prime minister through a speedily revolving door. His victory was confirmed when his last remaining challenger Penny Mordaunt dropped out of the race just a few minutes before the nominations closed. Britain is thus having three prime ministers in three months. Rishi Sunak is set to face Himalayan challenges to ensure political and economic stabilities when the Labor Party, the SNP and the Lib Dems are all demanding an immediate general election so that voters can have their say. A general election at this vulnerable time would be suicidal for both the conservative party and the nation's fragile economy.
The son of a pharmacist mother and doctor father, the first British Asian Prime Minister went to Oxford to study philosophy, politics, and economics and an MBA at Stanford University. He was an analyst for Goldman Sachs and had stints in hedge funds before becoming a member of parliament in 2015. Rishi Sunak, 42, is the youngest British prime minister in modern history.
Prime Ministers David Cameron and Tony Blair were both 43 when they took office. Going back in history all the way to 1783, we find there is only one prime minister younger than Rishi Sunak: William Pitt the Younger, just 24 when he took on the role. Rishi Sunak will become also the wealthiest ever prime minister of the United Kingdom, with his family's personal fortune surpassing even that of the royals. Inflation in Britain now stands at over 10 percent. Living standards have eroded, with Britons set to see the biggest drop in disposable income since records began. Energy blackouts could be coming soon. The number of people in fuel poverty could reach more than 10 million anytime soon. The economy is truly anemic. After 12 years in power, the Conservative Party seems to be out of basic ideas. Balancing the books by cutting social spending, shifting the burden onto the backs of ordinary people rather than the wealthy may be the course Rishi Sunak will be willing to advocate. In the name of fiscal rectitude, he may rein in public spending and cut social protections. After all, Rishi Sunak is wedded to Thatcherite notions of constrained public spending. His Thatcherite propensity is no secret.
Last summer, Rishi Sunak wrote in The Telegraph, “I am a Thatcherite, I am running as a Thatcherite, and I will govern as a Thatcherite.” When Rishi Sunak was chancellor, he failed to deal with the inflation. He was widely criticized for not doing enough to protect the country’s poorest. His scant plans for the worse off were deemed insufficient and inefficient. His captaincy in fixing the British economy burdened by a 40-billion-pound black hole in the public finances will be daunting. British people have not forgotten how Rishi Sunak, as former chancellor of exchequer, untiringly responded during the pandemic by rolling out unprecedented levels of government aid -- some £376 billion -- to support businesses and workers. His moves are credited with preventing a huge spike in unemployment.
Britain needs compassionate leadership when the country is economically stagnant, regionally unbalanced, and socially strafed. Despite his appearance of calm and competence, will Rishi Sunak be able to bring unity, stability, and prosperity for his country? He will undoubtedly, if there is unity in his own Conservative Party and if only political parties in the opposition camps keep mum for a while and wait to see how the youngest prime minister weathers the economic storms looming ominously not only in Britain but also the whole world over.
The writer is a retired banker and freelance columnist. He can be contacted at maswood@hotmail.com
